Liu, B. and Li, L. (2021) Internal-control willingness and managerial overconfidence. Frontiers in Psychology, 12. 724575.
Abstract
Internal control is a branch of accounting subject, and accounting control and risk management are the core of enterprise internal control. Previous studies have shown that high-quality internal control inhibits or regulates managerial overconfidence (MOC). However, it is believed that the influential factors of internal-control quality (ICQ) are normally objective factors, such as corporate characteristics, financial status, and governance structure. Corresponding to another type of constituent element, that is, the subjective factor, which we called internal-control willingness, has not been explored. In this study, we defined internal-control willingness as the degrees of the subjective initiative of the internal-control construction and execution activities of enterprises. In addition, we proposed a method to measure internal-control willingness based on text analysis and principal component analysis using Python, and then, we tested its impact on ICQ and MOC. Our findings are as follows: (A) internal-control willingness has a positive impact on ICQ, and (B) internal-control willingness lowers MOC. Our study introduces subjective initiative factors into the field of internal control and also extends the understanding of internal-control theory. Based on empirical conclusions, we suggested that regulatory authorities and corporate boards improve incentive mechanisms to jointly strengthen the internal-control willingness of all employees, so as to help enterprise managers operate rationally.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2021 The Authors. This is an open-access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/). The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms. |
Keywords: | willingness; managerial overconfidence; internal-control quality; internal-control willingness; internal control |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 10 Jan 2022 13:49 |
Last Modified: | 10 Jan 2022 13:49 |
Status: | Published |
Publisher: | Frontiers Media S.A. |
Refereed: | Yes |
Identification Number: | 10.3389/fpsyg.2021.724575 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:182252 |